State Approves Insurance Policy That Will Give Uber And Lyft Drivers 'Gap' Protection

Massachusetts Uber and Lyft drivers will soon be able to purchase insurance to fill in gaps of coverage while they offer ride-hailing services.

Gov. Charlie Baker and the Division of Insurance announced Monday that the United Services Automobile Association (USAA) has been approved to offer additional coverage to its policyholders who drive for ride-hailing companies, or so-called transportation network companies (TNC).

TNC drivers, like all drivers, are required to carry personal automobile insurance, but, the governor's office said, are "excluded from coverage on their personal policies when operating a personal vehicle to transport goods or passengers for a fee." Uber and Lyft do provide insurance coverage to drivers from the time a ride is accepted until it's complete.

But there is a gap in insurance coverage for drivers from the time they turn on a ride-hailing app and are awaiting a ride request to the time they actually accept a ride request. USAA will provide “gap protection” coverage that will protect drivers during the time they are not covered by their own personal insurance or a ride-hailing company’s insurance.

“It’s crucial that appropriate coverage is available to protect drivers, passengers and the traveling public,” Baker said in a statement.

USAA will begin offering the policy — the first of its kind in Massachusetts — on Nov. 21, and it will take effect on or after Jan. 7, 2016.

The announcement is the latest development in the ongoing fight between taxis and ride-hailing companies. Some taxi advocates say more needs to be done about the insurance issue.

"The fact that USAA is providing 'gap' insurance indicates the Uber-driver coverage gap is real,” Dave Sutton, a spokesperson for the 'Who's Driving You?' public safety initiative of the Taxicab, Limousine & Paratransit Association, said in a statement. “Until gap coverage is available to all Uber drivers in Massachusetts, passengers and third parties — such as other drivers and pedestrians — will continue to be at risk for ambiguous and delayed insurance compensation.”

And as state lawmakers continue to craft legislation to regulate ride-hailing services, the governor is calling for more insurance companies to submit proposals on so-called “gap protection” for consideration.

“With the first endorsement of its type taking effect for TNC drivers, we welcome others to participate in supporting consumer safety and choice in Massachusetts’ diverse transportation network,” Baker said Monday.